Class 12 Micro Economics - Chapter Market Equilibrium NCERT Solutions | Can you think of any commodity on which
Can you think of any commodity on which the price ceiling is imposed in India? What may be the consequence of price-ceiling?
In India, there are many goods on which government has imposed price ceiling, in order to keep them available within the reach of the BPL (below poverty lime) people. These goods are kerosene, sugar, wheat, rice, etc. The following are the consequences of price ceiling:
1) Excess demand - Due to artificially imposed price, cutting lower than the equilibrium price leads to the emergence of the problem of excess demand.
2) Fixed Quota - Each consumer gets a fixed quantity of good (as per the quota). The quantity often falls short of meeting the individuals requirements. This further leads to the problem of shortage and the consumer remains unsatisfied.
3) Inferior goods - Often it has been found that the goods that are rationed are usually inferior goods and are adulterated.
4) Black marketing - The needs of a consumer remain unfulfilled as per the quota laid by the government. Consequently, some of the unsatisfied consumers get ready to pay higher price for the additional quantity. This leads to black-marketing and artificial shortage in the market.
More Questions From Class 12 Micro Economics - Chapter Market Equilibrium
- Q:-
How will a change in the price of coffee affect the equilibrium price of tea? Explain the effect on equilibrium quantity also through a diagram.
- Q:-
Suppose the price at which the equilibrium is attained in exercise 5 is above the minimum average cost of the firms constituting the market. Now if we allow for free entry and exit of firms, how will the market price adjust to it?
- Q:-
When do we say that there is an excess demand for a commodity in the market?
- Q:-
Suppose the market determined rent for apartments is too high for common people to afford. If the government comes forward to help those seeking apartments on rent by imposing control on rent, what impact will it have on the market for apartments?
- Q:-
When do we say that there is an excess supply for a commodity in the market?
- Q:-
In what respect do the supply and demand curves in the labor market differ from those in the goods market?
- Q:-
Explain market equilibrium.
- Q:-
If the price of a substitute Y of good X increases, what impact does it have on the equilibrium price and quantity of good X?
- Q:-
Explain how price is determined in a perfectly competitive market with a fixed number of firms.
- Q:-
How is the optimal amount of labor determined in a perfectly competitive market?
Popular Questions of Class 12 Micro Economics
- Q:-
Explain the concept of a production function
- Q:-
What would be the shape of the demand curve so that the total revenue curve is?
(a) A positively sloped straight line passing through the origin?
(b) A horizontal line?
- Q:-
Discuss the central problems of an economy.
- Q:-
What are the characteristics of a perfectly competitive market?
- Q:-
What do you mean by the budget set of a consumer?
- Q:-
What is the total product of input?
- Q:-
From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:
Quantity
1
2
3
4
5
6
7
8
9
Marginal
Revenue
10
6
2
2
2
0
0
0
-
- Q:-
What do you mean by the production possibilities of an economy?
- Q:-
How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?
- Q:-
What is budget line?
Recently Viewed Questions of Class 12 Micro Economics
- Q:-
Consider a market where there are just two consumers and suppose their demands for the good are given as follows:
Calculate the market demand for the good.
p
d1
d2
1
9
24
2
8
20
3
7
18
4
6
16
5
5
14
6
4
12
- Q:-
How does the imposition of a unit tax affect the supply curve of a firm?
- Q:-
Why does the SMC curve cut the AVC curve at the minimum point of the AVC curve?
- Q:-
Suppose there are two consumers in the market for a good and their demand functions are as follows:
d1(p) = 20 – p for any price less than or equal to 20, and d1(p) = 0 at any price greater than 20.
d2(p) = 30 – 2p for any price less than or equal to 15 and d1(p) = 0 at any price greater than 15.
Find out the market demand function.
- Q:-
Suppose there was a 4 % decrease in the price of a good, and as a result, the expenditure on the good increased by 2 %. What can you say about the elasticity of demand?
- Q:-
From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:
Quantity
1
2
3
4
5
6
7
8
9
Marginal
Revenue
10
6
2
2
2
0
0
0
-
- Q:-
What do you mean by ‘monotonic preferences’?
- Q:-
A consumer wants to consume two goods. The prices of the two goods are Rs 4
and Rs 5 respectively. The consumer’s income is Rs 20.
(i) Write down the equation of the budget line.
(ii) How much of good 1 can the consumer consume if she spends her entire
income on that good?
(iii) How much of good 2 can she consume if she spends her entire income on
that good?
(iv) What is the slope of the budget line?
Questions 5, 6 and 7 are related to question 4. - Q:-
Distinguish between a centrally planned economy and a market economy.
- Q:-
What are the average fixed cost, average variable cost and average cost of a firm? How are they related?
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